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The True Cost of Delivery

Regardless of how efficiently your florist business operates, the process of making deliveries to customers must always be correctly completed and there are worthwhile benefits involved in doing this as efficiently as possible. The reality is that most retailers don’t know the true cost of their delivery model.

The past few years have seen rapid changes in customer shopping habits, as we know. Put simply, consumers want to find it, order it, pay for it, track it, receive it, review it, and return it or recover their payment if they are unhappy with the purchase. The past two years, when customers have been unable to browse around shops, have driven this rapid change ever forward.


Delivering on these changing customer expectations has been especially difficult for florists. Let’s look at just one aspect of the current supply chain model, ‘Failed Deliveries’. Failed deliveries come at an eye-watering cost to the industry. The Valuing Home Delivery Review 2018 by IMRG reports that failed deliveries cost retailers, delivery partners and customers £1.6bn per year. Drilling down further, a late delivery, a lost delivery and a failed first delivery costs each time they occur on a route.

If retailers get a delivery right, they can win a customer for the long term. But get it wrong and they can lose them for good.

Planning how to deliver orders at least cost whilst ensuring all orders are delivered on time can be challenging. This challenge becomes particularly acute at times of very high demand, such as Valentine’s Day and Mother’s Day.


As you gain more customers, the time and cost complexity of servicing all of them goes up exponentially. Costs associated with preparing and loading the deliveries, telephone calls and texting, providing status updates to 3rd party providers with photos and errors etc. Then planning the actual routes, considering timed deliveries, and tracking where the driver is. These are some of the biggest hurdles to enabling growth for any delivery business.

Expenses such as fuel costs, driver wages, and vehicle insurance and maintenance can be directly or indirectly related to the miles driven and can quickly increase if you are not careful. Poorly planned routes lead to more miles driven, higher fuel consumption, increased driving time, therefore higher wages, not to mention higher vehicle maintenance costs.



Let’s look in a bit more detail at some of the costs mentioned.


Increased fuel consumption

Your drivers will end up driving around the same location several times if the routes given to them are not optimized. This will lead to excessive fuel usage. Fuel usage will also be much higher if you have more than one shop and more than one vehicle. They will consume more diesel or petrol if your drivers speed up to reach customers on time. Your drivers may be able to gain time, however, extra fuel usage will cost.


Increased wages

You may have a shortage of drivers if the routes are not well-optimized. This means that your existing drivers need to work longer, leading to increased payment to drivers. You may need to hire more drivers to cover every single customer location on time especially if there are timed deliveries on the route, which is where, as a service industry, we are headed. Then there are the training expenses to get your drivers up to full capacity. It may take time for them to perform as efficiently as you would like. That means you need to pay more for recruitment, training, salary, and overtime. Also consider the extra costs explaining your existing routes to every new employee or team member that you might take on.


Customer complaints & errors

Poor route planning can cost your business a lot if your drivers need to deliver in a precise time window. For example;


Your shop must deliver fresh flowers within a specific time every day. So, you need to ensure that there is room in the shop for:

Unloading of returned stock.

Meeting flower preparation and stocking deadlines.

If they show up too early, another delivery van might be in the way.


Soon enough if the above is not resoled efficiently, your customers will look elsewhere for on-time delivery.


Dealing with unacceptable work habits

Do you know your employees’ behaviour can also damage your business? We have mentioned how inaccurate planning can lead to your drivers’ missing deadlines. Being a manager or a business owner, you know the negative side of this. But your drivers do not. They will develop their routine. So, your drivers may still not show up on time even if you alter their route the next time. They know best. All this creates a negative impression for your customers. It will damage your business and it will cost you money.


Using technology to your advantage such as FloriSyst Software, optimising their delivery routes, tracking, driver notes, and photos captured on an app and delivered to your portal will help you identify the cause of every late pick up or delivery, and you won’t be beholden to your drivers.


The true cost of failed deliveries It could be argued that, for consumers, the delivery of a product is the most important part of the online shopping experience, but it’s something that so many sellers still haven’t quite mastered. Recent research has shown that failed deliveries are costing UK businesses millions of pounds each year, with peak purchasing periods like Christmas, Mother’s Day and Valentine’s Day proving particularly pricey for florists. The facts and figures In its ‘Coming Together’ report, released towards the end of 2017, the company Sorted estimated that there would be £2.3 billion worth of failed deliveries over the Christmas period. The study found that 39% of shoppers lose trust in a company’s capacity to meet their needs if an order isn’t delivered on time, and nearly half – 48% - said a late delivery would make them less likely to buy from the same retailer again. Preventing failed deliveries Failed deliveries aren’t completely avoidable, but there are ways to minimise the risk and keep your customers happier.


What is the answer? Fleetwizard’s innovative delivery platform FloriSyst allows for failed deliveries to be held until re-planned for next delivery attempt. Also, if a delivery is left in a customer’s safe place, the delivery driver can take a timed photograph which is stored in the App. This photograph is available if a customer claims that delivery did not take place. Avoiding a second delivery in a dispute is a significant saving. Saving on cost of claims for non-delivery when delivery had occurred. Automation The right investment will drive customer experience through more dynamic, personalised, trackable, and reliable deliveries. Automation takes difficult tasks and does it in seconds. With FloriSyst Software, delivery routes can be optimised so that mileage, driver time and fuel consumption are minimised, driver and vehicle efficiency is achieved and there is a benefit of carbon footprint reduction. This can be done by using the power of extremely sophisticated optimisation software. The drivers are tracked and orders are updated giving you a real-time view of the operation, whilst saving you time and money. By eliminating errors, customer deliveries are made right first time, saving time and cost meaning a happy company and a happy customer.

 

Brought to you by our Corporate Partner FleetWizard Florisyst. For more information visit their Partner Profile FleetWizard Corporate Partners | Floristry Trade Club

 

At The Club, we have lots of resources to help with financial worries. Check out these articles:

 

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